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Wednesday, January 16, 2008

FXstreet.com (Barcelona) – Inflation at consumer level remains at very high levels fuelled by sharp increases in transport, food and alcohol and in energy, core CPI growth remains at more moderate pace, according to the latest report by the US Labor Department.

Consumer prices have increased 4.1% in December from the same month last year, pushed by the 17.4% increase in energy, the 8.3% increase in transportation and the 4.8% yearly increase in food and beverages. Excluding food ane energy, consumer prices rose 2.% on the year.

The yearly CPI increase has been inches lower than the 4.3% posted in November, whereas it grew almost twice as fast as the 2.5% posted in the 2006. Ian Shepherdson, Chief U.S. Economista t High Frequency Economics, Ltd, does not think this is a reason for alarm as he forecasts CPI back to 2.5% in some months: “Elsewhere, nothing alarming. The headline was boosted by energy prices; food was up only 0.1%. The Dec headline y/y is at a 17-month high of 4.1% but it will drop towards 2.5% in the spring, while slower growth will take care of the core.”